From Exhibit 23-5**$19,200 + $25,600 from Exhibit 23-5

The income statement shows that the net effect of all the manufacturing cost variances is $8,320 favorable. Therefore, 2017s operating income is $8,320 more than it would have been if all the actual manufacturing costs had been equal to their standard costs.

Exhibit 23-19 Standard Cost Income Statement CHEERFUL COLORS Standard Cost Income Statement For the Year Ended December 31, 2017 Sales Revenue at standard (52,000 batches @ $7.50) Sales Revenue Variance* $ 390,000 (5,200) 384,800 Sales Revenue at actual $ 312,000 Cost of Goods Sold at standard (52,000 batches @ $6.00) Manufacturing Cost Variances: Direct Materials Cost Variance Direct Materials Efficiency Variance Direct Labor Cost Variance Direct Labor Efficiency Variance Variable Overhead Cost Variance Variable Overhead Efficiency Variance Fixed Overhead Cost Variance $ (9,750) 22,750 20,800 (31,200) (1,040) (7,800) (1,080) (1,000) Fixed Overhead Volume Variance (8,320) Total Manufacturing Variances Cost of Goods Sold at actual Gross Profit 303,680 81,120 44,800 Selling and Administrative Expenses** Operating Income $ 36,320 Exhibit 23-19 Standard Cost Income Statement CHEERFUL COLORS Standard Cost Income Statement For the Year Ended December 31, 2017 Sales Revenue at standard (52,000 batches @ $7.50) Sales Revenue Variance* $ 390,000 (5,200) 384,800 Sales Revenue at actual $ 312,000 Cost of Goods Sold at standard (52,000 batches @ $6.00) Manufacturing Cost Variances: Direct Materials Cost Variance Direct Materials Efficiency Variance Direct Labor Cost Variance Direct Labor Efficiency Variance Variable Overhead Cost Variance Variable Overhead Efficiency Variance Fixed Overhead Cost Variance $ (9,750) 22,750 20,800 (31,200) (1,040) (7,800) (1,080) (1,000) Fixed Overhead Volume Variance (8,320) Total Manufacturing Variances Cost of Goods Sold at actual Gross Profit 303,680 81,120 44,800 Selling and Administrative Expenses** Operating Income $ 36,320